2013-08-17 Coindesk.com - Bitcoin Law: What US businesses need to know

[Stephen Gornick]

Bitcoin Law: What US businesses need to know
by Marco Santori  [Chairman of the Bitcoin Foundation’s Regulatory Affairs Committee]

This is a basic primer on the state of US law as it applies to digital currency entrepreneurs.

If the last few months have taught us anything, it is that there will soon exist a new and evolving body of law: The Law of Digital Currency, or, as some would prefer it: Bitcoin Law.
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[...] 'virtual currency' is something of a loaded term, and bitcoin may not even be best described as a currency at all.
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[In addition to regulators FinCEN and the SEC, the] consensus among legal professionals is that two more government agencies might soon have a hand in the market as well: the Commodity Futures Trading Commission (CFTC) and the Consumer Financial Protection Bureau (CFPB).
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Some have called [FinCEN's issuance of guidance] bitcoin’s 'watershed moment' because of its clear, unequivocal positive message: bitcoin is not illegal. The negative consequence, though, was just as obvious: Many bitcoin businesses models are illegal.
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In effect, the [Bank Secrecy Act (BSA)] deputizes financial institutions, requiring them to act as the government’s foot soldiers in its war on money laundering.

 - http://www.coindesk.com/bitcoin-law-what-us-businesses-need-to-know

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[dree12]

The US is a dead state when it comes to Bitcoin. Bitcoin's future is in Europe, Asia, Canada, Africa, etc. Basically, everywhere except for the United States.

Pax Americana is coming to an end.

[TraderTimm]

Governments around the world will have to deal with the new force of Bitcoin, and more importantly, a currency that doesn't allow their dirty tricks anymore. That is the real struggle, years of pulling the wool over the eyes of every citizen is being thrown bare. If you can't compete, you'll try to kill it, and when that doesn't work - you either will adapt or fade away.

Here's to the fuckers fading away, because they've already shown (most of them) that they can't adapt.

[Stephen Gornick]

Basically, everywhere except for the United States.

Speeding is illegal on the roads within the U.S. yet the average speeds often exceed the posted limit.  Marijuana is illegal to possess, per federal law, yet a visitor to a city could likely find a source and acquire some in a matter of minutes.

But few people would go thirty miles over the speed limit without expecting a run-in with the law.

The point is, bitcoin has a future in the U.S. even if exchanges are regulated out of existence.

[DeathAndTaxes]

This isn't legal advice but I would like to point out that the FinCEN guidance isn't the law, it is simply how FinCEN interprets existing law.  FinCEN guidance on virtual currencies is contradictory and breaks the precedent of prior administrative rulings on what is and isn't in the scope of money transmission.   It is possible that eventually someone will get involved in a lawsuit with FinCEN and the guidance merely the playbook on how FinCEN intends to proceed.  If they can't convince an old guy in a robe that their playbook has any merit then guidance is worthless.

FinCEN took too much of a stretch trying to shoehorn this new technology into an existing framework that they covered activities that in the past they had declared the same activities to NOT be covered.  I don't see this highly capricious and vague guidance standing the test of time.

It is a shame because they were not forced to act.  They could have taken their time, they could have revised the MSB statutes to create a new category or revised the regs on foreign currency exchange to become "currency exchange" including virtual currency.  Instead they decided to act rashly using some very tortured legal opinions to blanket cover all fiat to virtual transactions.

The end result is a stiffing of innovation, a loss of productivity, and barriers to entry. The only winners will be lawyers (no offense to Mr. Santori) as it takes years to figure out what hell FinCEN "means" (pretty tough when I am pretty sure FinCEN doesn't know).

[knight22]

Governments around the world will have to deal with the new force of Bitcoin, and more importantly, a currency that doesn't allow their dirty tricks anymore. That is the real struggle, years of pulling the wool over the eyes of every citizen is being thrown bare. If you can't compete, you'll try to kill it, and when that doesn't work - you either will adapt or fade away.

Here's to the fuckers fading away, because they've already shown (most of them) that they can't adapt.

lol 

+1

[Bitcopia]

Looking forward to Part II of this article and Mr. Santori's thoughts on state regulation and registration hurdles.

[MSantori]

I literally just saw this post...  Two months late.  Anyway, I hope you folks liked it. Part 2 is out as well.  Part 3 hopefully in a few weeks!

[Stephen Gornick]

Part 2 is out as well.

Part 2:

Bitcoin Law: Money transmission on the state level in the US
 - http://www.coindesk.com/bitcoin-law-money-transmission-state-level-us/